Empathy Marketing, the marketing services firm behind the successful consumer website Pigsback.com, is to launch an ISP in the Irish market. The service, to be known as Pigsback Connect, will be available from this Friday and will offer low-cost internet connections to Pigsback members of whom there are currently 175,000. The service will be available in the Republic only.
Empathy, which has 27 full-time staff, is hiring six more to manage the venture and expects overall headcount to reach 40-plus within 12 months. The company is also in the process of moving to bigger premises in Dublin’s Citywest Business Campus.
Pigsback Connect will be based on the ‘virtual ISP’ model so successfully adopted by Virgin.net in the UK. Pigsback Connect will use the telecoms infrastructure of UTV Internet, the Belfast-based telco and ISP, to offer the service.
Pigsback Connect will be marketed on Pigsback.com; a yellow click-through button on the home page will invite members to sign up to the ISP.
Pigsback Connect will initially offer two services: pay-as-you-go dial-up and subscription dial-up services but the ISP plans to add a number of new services later in the summer including a flat-rate product that would give users unlimited surfing for a flat monthly fee (made possible by the impending introduction of FRIACO) and a broadband offering.
The subscription dial-up service will cost €9.99 per month and give users 27 hours of free off-peak web usage a month (or 0.61c a minute) plus a 25pc discount on peak call charges. This undercuts the offering of the next cheapest competitor, Esat BT’s IOL, whose NetSmart service offers 40 hours off-peak surfing for €15 (0.63c a minute).
Pay-as-you-go customers, who will pay standard per-minute call charges, will get 10pc of their phone bill back every month in the form of piggy points redeemable on the Pigsback.com site against a range of products and services from free pizza to cinema tickets.
“These points will be merged with members’ existing Pigsback points so it’s another way to earn more points and its enhancing the overall offering for members,” said Rory Duggan, chief financial officer, Pigsback.com.
“It’s about bringing other services to the devotees of Pigsback – people who see the Piggy points as currency and who want a choice of ISP,” he added.
According to Pigsback.com founder and CEO Michael Dwyer, the decision to launch an ISP was backed by in-depth market research, which showed dissatisfaction with the current offering in the ISP market. “We sent out 30,000 questionnaires to Pigsback members. Of the 25pc who responded, 87pc said they were ‘likely’ or ‘very likely’ to take up the [Pigsback Connect] service. Why is that? Because they’re into the brand, they’re into the piggy points and we’ve main certain commitments to them by way of what we can supply in terms of a product or service.”
Dwyer felt that the other ISPs in the market were too preoccupied with broadband and that this was out of step with what web users wanted. “Broadband is critical in the longer term but most consumers are still at the early stages of their commitment to the internet and therefore for them it’s more appropriate that they have a good dial-up package with competitive rates.”
Dwyer added: “We want to give Irish consumers as many reasons as possible to come into Pigsback.com … we realise we have some very valuable equity in terms of our relationship with members and if we can find some services for members that allow us to leverage some revenue from that relationship then that’s very good for us as well.”
Empathy Marketing has made profits of €200k on an annual turnover of €2.5m in the current financial year ending 30 June 2003 and is projecting to make €500k on revenues of €3.5m for the coming year, excluding any revenue from the ISP business. It also plans to drive Pigbacks.com membership up from the current 175k to 250k by the end of 2004 and to 500k by the end of 2007.
Empathy Marketing was established in April 2000 with the website launch coming three months later. The business is currently exploring the possibility of launching Pigsback.com in the UK some time next year.
By Brian Skelly